DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH
Introduction
South Africa continues to experience high levels of unemployment compared to other countries at the same level of development. This contributes to high levels of poverty and inequitable distribution of income. In addition, the economy faces a number of structural constraints that impact on its ability to generate growth and support employment creation in the long-term. Addressing the unemployment challenge and the structural constraints of our economy will require active investment and interventions by the state to create an enabling environment to stimulate inclusive growth and support the creation of decent employment on a large scale. The Department of Economic Development, Tourism and Environmental Affairs is one of the lead departments of the provincial government’s contribution to the achievement of Outcome 4: Decent Employment through inclusive economic growth.
Delivery Agreement
The Delivery Agreement details four outputs, namely;
Output 1: Faster and sustainable inclusive growth
South Africa has experienced somewhat lower rates of growth than comparable economies over the past ten years and its per capita GDP growth leaves it ranked amongst middle-income developing countries. Levels of unemployment and income inequality are among the highest in the world. Provision is made for the following sub-outputs; (i) Developmental Growth Path, (ii) Measurement of Income Distribution, (iii) Stable and Competitive Exchange Rate, (iv) Increased Private Savings, (v) Monetary Policy approach that supports balanced and sustained growth, (vi) counter cyclical fiscal policy and (vii) agreement with social partners to (a) promote the goal of decent work through inclusive growth and (b) strengthen implementation of the framework response.
Output 2: More labour absorbing growth
The South African economy has developed on a growth path that has made insufficient progress in creating jobs, and reducing inequality. Furthermore, challenges relating to climate change demand an integrated response. Faced with these challenges, the developmental growth path is intended to enhance the labour-absorbing capacity of the economy, to build a lower carbon-emission economy and to find ways to connect knowledge and innovation to the challenge of jobs and growth. The creation of a more labour-absorbing economy will require increased coordination of macroeconomic and microeconomic interventions as outlined in the growth path. One aspect of the decent work goal is to address quality of employment issues. These relate to the effective use of tools and the development of new measures to address vulnerability in the labour market.
The following sub-outputs have been identified as key to the achievement of the output and consequently the outcome; (i) Financing for Industrial Development, (ii) Improved State Procurement Practices, (iii) Sector strategies to support growth of labour intensive industries, (iv) spatial programmes and (v) green economy.
Output 3: Multi-pronged strategy to reduce youth unemployment
The problem of youth unemployment in South Africa is acute and worsened significantly during 2009. Employment of 18 to 24 year olds fell by 13.2 per cent (208 000) compared with an overall decline of 6.3 per cent. Half of all 18 to 24 year olds are unemployed, accounting for about 30 per cent of total unemployment. National Treasury estimates that the average probability of an 18 to 24 year old of finding a job is just 25 per cent while the youth find jobs at a much slower rate than older unemployed individuals. Including those aged 25 to 29 years old adds another million to the unemployed. The unemployed youth tend to be relatively less skilled and inexperienced. Almost 86 per cent of unemployed youths have either some secondary education or completed high school while two-thirds have never worked. Inexperience is a particular drag on employment prospects and helps to explain much of the implicit age discrimination in the South African labour market.
Activities to be undertaken by the national government in this area will include: (i) Reviewing the legislative environment, (ii) Identifying the desirable scope, with budgets, of youth brigades and other forms of public employment, (iii) Conducting an assessment of the potential youth wage subsidy including an experiment, (iv) Improving education performance and skills development in the schooling and further education system, (v) Improving the public employment services available to the youth to aid matching of skills, job search, career guidance and counselling, skills development and job placement, (vi) Establishing a monitoring system with regular reports on progress and (vii) Strengthen relationships with the NYDA and other youth services agencies.
Output 4: Increased competitiveness, to raise net exports, grow trade as a share of world trade and improve its composition
The growth and diversification of South African exports has been weak, with over half of all exports derived from the mining value chain. In order to stabilise growth it is important to diversify exports including into higher value added activities and to improve overall competitiveness. Provision is made for the following sub-outputs; (i) Support for exports and import competing sectors, (ii) increased share of world trade and (iii) Increased R&D to support growth and development.
Output 5: Improved cost structure in the economy
The economy is currently characterised by high cost structures arising among others from a combination of concentrated market structures, issues around infrastructure quality and financing, bottlenecks in skills and education, rising healthcare costs, above-inflation increases in administered prices, cyclical spikes in food prices, unnecessary inefficiency in regulations in some cases, and inefficient cities as a result of apartheid settlement patterns.
Interventions to promote appropriate cost structure will be researched and its focus will include; Infrastructure and skills bottlenecks, administered prices, healthcare costs, cost and quality of commuter transport, cost of food and inefficient regulations or implementation systems
Output 6: Improved support to small business and cooperatives
SMMEs and co-operatives present an important vehicle to address the challenges of job creation, economic growth and equity. Realising the potential of small enterprises to growth and employment will require support to improve both the supply side factors such as finance and technical support, together with finding ways to strengthen market opportunities for small enterprises including cooperatives. Significant attention has been given to improve the institutional structure and regional foot print of institutions that provide business development support to small enterprises.
While there has been significant coverage of small enterprises through existing institutions, small enterprise support and financing has not been adequately effective. There is a need to improve access to finance, the quality of support services and market access for small enterprises. Identified sub-outputs include; (i) Reduced constraints and improved support to SMMEs and co-ops and (ii) Improved integration of 2nd economy activities into the mainstream economy.
Output 7: Implementation of the Expanded Public Works Programme
The delivery of public services through the use of labour-intensive methods provides an opportunity to create additional work. Expansion of the public works programme needs to be accelerated further to create opportunities for the transfer of income to the unemployed through the provision of work to alleviate poverty.
Identified sub-outputs include; (i) Expansion of the scope and duration of public employment opportunities, (ii) Expansion of employment in the social sector, (iii) Expansion of employment in the infrastructure sector and (iv) Expansion of employment in the environmental sector.
DELIVERY AGREEMENT
ENVIRONMENTAL ASSETS AND NATURAL RESOURCES
Introduction
Section 24 of the South African Constitution stipulates that all South Africans have a right to an environment that is not harmful to their health or well-being and to have the environment protected for the benefit of present and future generations. The Constitution compels us to take reasonable steps to prevent pollution and ecological degradation, promote conservation and secure ecologically sustainable development and use of natural resources. The protection and enhancement of South Africa’s environmental assets are therefore included in the priority outcomes of government. South Africa’s environment is deteriorating and we are not immune to the global environmental crisis. The country faces a number of current and emerging issues related to climate change, requiring intensive mobilisation to effectively respond to these challenges. Sustainable development and efforts to mitigate climate change and/or adapt to its impacts, in general, have a mutually beneficial relationship.
Efforts to address climate change have co-benefits that contribute to sustainable development goals. Due to the nature of its impacts on environmental, social and economic systems Climate Change can no longer be regarded as an environmental challenge but rather a sustainable development challenge. South Africa needs to respond to declining groundwater reserves, water quality and the integrity of our ecosystems in the context of growing demand for water. The country has a rich diversity of natural assets and is considered one of the world’s most bio-diverse countries. Although South Africa makes up just 2% of the global land area, it is home to almost 10% of the world’s plants and 7% of reptiles, birds and mammals. Sadly much of South Africa’s terrestrial ecosystems and over 80 percent of the river systems are threatened.
South Africa ranks among the world’s 20 biggest greenhouse gas emitters and we are the highest emitter within the African Continent. Unaddressed, these issues could seriously undermine South Africa’s ability to pursue a sustainable development path and our ability to address developmental challenges. Spatial planning and spatial development decisions are still fragmented and there is still a need to address competing land uses and ensure that industry and infrastructure development programmes facilitate the long term sustainability of natural systems and the environment. The concluded Delivery Agreement focuses the resources, planning and implementation actions of government (both national and provincial) to achieve the desired outcome with respect to the protection and enhancement of the country’s natural resources. The Department of Economic Development, Tourism and Environmental Affairs is the lead provincial department to ensure the successful achievement of this outcome.
Delivery Agreement
The management of the environment and protection of natural resources is a concurrent function between the national and provincial spheres of government. A delivery agreement was concluded between the Minister for Water and Environmental Affairs and Members of Executive Councils responsible for the environmental portfolio at provincial government level. Other key delivery partners were also signatories to the Delivery Agreement. Members of Executive Councils (MECs) also signed for the deliverables of municipalities within the respective provinces. The monitoring and coordination of implementation of deliverables as outlined in the delivery agreement is coordinated through the Intergovernmental Relations structures like MINMEC (Minister’s meeting with the MECs), Economic Sectors and Employment Cluster and intergovernmental mechanisms extended to include key departments, public entities and other partners that contribute to the achievement of the outputs.
The Delivery Agreement details four outputs, namely;
Output 1: Enhanced quality and quantity of water resources
Water demand is expected to rise by 52% over the next 30 years while supply of water is likely to decline if current trends due to leakage from old and poorly maintained municipal infrastructure and the loss of wetlands persist. This would make the prospect of water shortage a frightening reality in the near future. To enable more efficient management of our water resources, the Delivery Agreement provides for sub-outputs, namely (i) water demand, (ii) water resource protection and (iii) regulation of water quality.
Output 2: Reduced greenhouse gas emissions, climate change impacts and improved air/atmospheric quality
Climate change is considered to be amongst, if not the, most serious threat to humanity and sustainable development with adverse impacts expected on food and water security, economic activity, human health, physical infrastructure and natural resources. These impacts will seriously undermine efforts to achieve sustainable development and the attainment of Millennium Development Goals particularly in developing countries which are both the most vulnerable, and the least equipped to deal with climate change. Conversely, addressing climate change by mitigating greenhouse gas emissions and building resilient communities will make a major contribution towards achieving a sustainable society.
In order to address these challenges, the Delivery Agreement provides for the following sub-outputs, namely; (i) reduction of emission of CO2, (ii) reduction of atmospheric pollution, (iii) renewable energy deployment, (iv) adapting to the impact of climate change and (v) energy efficiency.
Output 3: Sustainable environmental management
The environment plays an essential role in determining future opportunities and constraints for growth and development. The past development has emphasised exploitation and optimisation of South Africa’s mineral and natural resources with little concern for long-term environmental impacts and sustainability. It has largely ignored constraints arising from the finite character of non-renewable natural resources and the ecological cycles that sustain renewable natural resources.
Provision is made to focus attention on the following sub-outputs; (i) restoration & Rehabilitation of degraded ecosystems, (ii) Deforestation & forest management, (iii) Less and better managed waste, (iv) Management of environmental impacts from mining and related activities and (v) Sustainable land use management
Output 4: Protected biodiversity
Keeping our biodiversity intact is vital for sustainable economic growth and development. This ensures ongoing provision of ecosystem services such as the production of clean air, clean water through good catchment management and prevention of erosion and carbon storage to counteract global warming. Consideration should be given to limit further loss of natural habitat in threatened ecosystems by more deliberate preservation and conservation of protected areas. The following sub-outputs have also been identified; (i) Expansion of the conservation estate, (ii) Reduced climate change impacts on biodiversity, (iii) Protected ecosystem & species, (iv) Valuing the ecosystem services and (v) Protection of agricultural land.